The Local Approach: The State of
Localized Advertising in Retail
2011 Prospective View
Nikki Baird and Steve Rowen, Managing Partners
July 2011
Sponsored by:
Executive Summary
As retailers struggle to create relevant, "local" experiences in digital channels, they are also
challenged to maintain their stores' relevancy - retailers must rethink the store's role in a shopping
process that increasingly relies on digital experiences.
RSR undertook an evaluation of how well retailers are using digital experiences to drive traffic to
stores. We divided the criteria into four categories: traditional advertising, digital advertising,
alternative offers, and on-site communication. We chose as broad an array of criteria as we could
- focusing on both traditional and new media channels, but with a particular emphasis on
channels that are primarily used for communicating offers.
For the retailers, because the research required some in-depth background research on each
one, we limited the participants to twenty, broken five each across four verticals:
department/clothing stores, sporting goods, electronics, and casual dining. We chose these
categories to represent a diverse pool of advertisers that tend to also be high-frequency
advertisers.
Aggregating across verticals, we found a diverse range of top performers, drawing on every
category except casual dining. The top five "local" advertisers were (out of a total of 45 points):
1.
2.
3.
4.
5.
Macy's - 31.5 points
J.C. Penney - 31 points
Sports Authority - 30.5 points
Best Buy - 30 points
Kohl's - 26.5 points
Of the five, J.C. Penney, Sports Authority, and Kohl's appeared to take a primary strategy of
ensuring at least mass coverage across all channels, with certain localization elements in only a
few advertising channels. Macy's and Best Buy, while achieving a certain amount of coverage
across all channels, appeared to follow more of a strategy of localization with a focus on key
channels.
The net result across all retailers: while there are specific instances of localized inspiration, as a
whole retailers have not implemented localization as a major part of their advertising strategy,
particularly as it relates to driving traffic to stores.
Specifically, we identified four areas of opportunity:
•
•
•
•
Be consistent in major branding elements across communications channels.
And yet, leverage the strengths of each communication channel to create something
unique.
Include the store as part of the call to action.
Rethink video strategies.
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Introduction
Context
Retail is struggling with a proliferation of touch points - of engagement opportunities with
consumers. This isn't necessarily new on the marketing front - retailers and brands have been
witnessing media fragmentation for the last decade, and still struggle with how to adjust their
communication strategies to accommodate the growth of new channels and smaller audiences.
For retail, the challenge is compounded by a proliferation of selling channels alongside the
fragmentation of communication channels - they increasingly have to drive traffic across more
channels with communication tools that reach smaller groups of consumers, albeit potentially in a
more targeted way.
Retailers feel the challenge the most in stores. The store is getting pinched between other selling
channels that steal away transactions, while the traditional media channels that used to work best
to drive traffic to stores are becoming less and less effective. However, for every challenge there
is an opportunity, and for stores one of the most important opportunities is "local."
Stores used to be the original "local" face to customers - consumers knew their store manager,
knew their sales associate or their local grocer, and retailers used their customer knowledge to
create personal experiences for their shoppers. But as chain retailing grew in size, those
experiences became more difficult to deliver in a way that was consistent with the overall brand
promise to customers - in other words, the local experience gave
The results are almost as diverse
way to a standard experience that could be delivered reliably no
as the retailers we evaluated, but
matter which store you were in. A "standard" experience had a
one overall conclusion stands out:
certain amount of value, but it came at the cost of local.
the industry is barely scratching the
Technology is rapidly making the best of both worlds possible: a
surface of the local opportunity.
way to provide central control over the brand promise, while also
providing a level of personalization to the shopper experience that brings back that local flavor.
The industry tends to speak about localization in generic terms - some blend of customizing the
message so that it appeals to a specific target area (whether people or geography) and/or
customizing the delivery of the message so that it only reaches that specific target area.
Nowhere is localization more important than the channel that is the most geographically
constrained - the store. The store is located in a neighborhood and a community, and it, too,
provides a face to the customer - it, too, has a role to play in delivering on the brand promise.
So retailers currently face something of a dilemma. From RSR's research, we have found that
retailers are laser-focused on providing a single brand identity to customers across channels.
However, they are also extremely challenged to redefine the role of the store in a cross-channel
world - and one of their biggest challenges is making sure that stores remain relevant as digital
channels increase in importance.
This report tackles the question of localized advertising. Because of the store's potential role in
localized communications, we chose to focus the research primarily on how well retailers are
using localization in their communication strategies, particularly on how they are using localization
to drive traffic to stores. The results are almost as diverse as the retailers we evaluated, but one
overall conclusion stands out: the industry is barely scratching the surface of the local
opportunity.
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Methodology
RSR primarily surveys retailers about their business challenges, opportunities, organizational
inhibitors and technology enablers, in order to understand their business strategies and how
those translate into technology adoption plans. However, sometimes retailers' intentions aren't
enough - sometimes it's more helpful to take a current snapshot of how close retailers' strategies
match what they are currently doing in the marketplace.
RSR covers the gaps between retailers' intentions and their current state through Prospective
Views. The methodology of each approach differs, depending on the topic covered and the
objective of the research. For our analysis of localized advertising, we evaluated retailers' current
efforts across four categories of customer communication, detailed below.
The Criteria
We divided the criteria into four categories: traditional advertising, digital advertising, alternative
offers, and on-site communication. We chose as broad an array of criteria as we could - focusing
on both traditional and new media channels, but with a particular emphasis on channels that are
primarily used for communicating offers. The only exception to this definition was TV advertising
within traditional channels, however even TV advertising has become more and more targeted,
and several providers within that channel have been developing localization capabilities for years.
Traditional advertising consists of TV advertising, newspaper circulars or free-standing inserts
(also known as FSI's), radio, in-store specials and events, direct mail, and print advertising
(including both newspaper and magazines) - effectively, all of the traditional, mass media
advertising channels. For these channels, we evaluated whether the retailer was executing
locally-controlled campaigns with no central theme or consistency, centrally-controlled campaigns
with no localization, or centrally-controlled campaigns with localized execution.
Digital advertising consists of display or banner ads, video advertising, mobile advertising, and
search term advertising - all of the new, online methods of reaching consumers. For these
channels, we evaluated whether the retailer provided brand-level advertising only, whether they
targeted their advertising, either by category or customer segment, or whether they provided
localization on top of their targeting - i.e., whether they customized their digital advertising by
geography.
Alternative offers are defined as some of the new, deal-of-the-day type offers like Groupon and
Living Social, as well as any promotional offers made via the retailer's own Twitter and Facebook
presences. For these channels, we evaluated whether the retailer had a presence in these
channels, and then whether they provided any offers via these channels, or if they localized these
offers at all.
Finally, on-site communication evaluates how well retailers currently collect the kind of
information that helps them localize their own communications with consumers. For this category,
we evaluated two criteria: whether the retailer offered localized information about their own stores
on their eCommerce site, and whether they solicited customer information, particularly email
address and mobile number, prominently on their site. For these criteria, we evaluated whether
the retailer provided for any information capture or store information (which could be as basic as
a store locator), up to providing prominent offers in exchange for email or mobile information and
dedicated pages for stores.
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The Retailers
For the retailers, because the research required some in-depth background research on each
one, we limited the participants to twenty, broken five each across four verticals:
department/clothing stores, sporting goods, electronics, and casual dining. We chose these
categories to represent a diverse pool of advertisers that tend to also be high-frequency
advertisers.
One unanticipated result of the study is that two of these verticals tend to be very brand-focused
in their advertising efforts (department stores and electronics), while sporting goods and casual
dining retailers tend to take more of a category strategy - sporting goods retailers, for example,
tend to segment their communication efforts by sporting goods category (baseball, soccer) and
casual dining retailers tend to cluster their promotions around dining themes ("It's lobster
month!"). This posed an excellent opportunity to contrast how the two different advertising
strategies play out within localization, and those results will be called out below.
To identify which retailers to evaluate, we leveraged a combination of Stores Magazine's 2010
Top 100 Retailers and the 2010 Hot 100 Retailers. The Top 100 Retailers are ranked by total
revenue. The Hot 100 are ranked by fastest growing revenues. Given the recent economic
environment, the growth rates of the Hot 100 fall off rather quickly, so there is actually a large
degree of overlap between the two lists.
We started out with a goal of three retailers from the Top 100 and two from the Hot 100 for each
vertical, as a way to contrast large, established advertisers against those with a heavy growth
strategy. In some cases, we had to take up to four retailers from the Top 100 in order to reach a
quorum of five retailers in the category. The list of retailers and their rankings on both lists is
included in Appendix A.
The Evaluation
We evaluated the retailers against the criteria through a number of methods. Primary methods
included direct review of retailer digital assets, including online presentation of FSI's, review of
their social media properties and online site, and review of current traditional and digital
advertising in their respective channels. We also conducted secondary research through a variety
of sources to find past evidence of advertising in the evaluated channels - case studies, trade
articles, brand profiles, etc.
Finally, we called the retailers directly and invited them to both participate and review the results.
Almost universally, the retailers declined participation.
The research was conducted in late June and early July of 2011. The results that we obtained
may not fully represent the retailers' advertising or communication strategies either at the time of
evaluation or in their entirety throughout the year. These results are intended as a snapshot, a
picture in time, and comparative only. Given the timing of the evaluation, also keep in mind that
strategies change, campaigns change, and also that retailers can be very holiday-oriented, so
what may have been found when we conducted the study may not be what you would find if you
conducted the study in November or December.
All of the criteria and our scores are available as a separate spreadsheet, and the summary
details are included in Appendix B of this document.
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Breaking Down the Scores
Overall Results
Aggregating across verticals, we found a diverse range of top performers, drawing on every
category except casual dining. The top five "local" advertisers were (out of a total of 45 points):
1.
2.
3.
4.
5.
Macy's - 31.5 points
J.C. Penney - 31 points
Sports Authority - 30.5 points
Best Buy - 30 points
Kohl's - 26.5 points
Of the five, J.C. Penney, Sports Authority, and Kohl's appeared to take a primary strategy of
ensuring at least mass coverage across all channels, with certain localization elements in only a
few advertising channels. Macy's and Best Buy, while achieving a certain amount of coverage
across all channels, appeared to follow more of a strategy of localization - but with a focus on key
channels.
Across the board, retailers appear to be looking more to social and digital channels to provide
localization opportunities, shunning the more expensive forms available to them via more
traditional channels. None of the retailers evaluated seem to take advantage of localization in
traditional TV advertising, not even to plug local stores in the area (much as a car manufacturer's
ad might feature local dealers at the end). While several retailers appear to offer the ability to
localize print circulars/FSI's, Staples was the only company
The net result across all retailers:
where we could find a visible example of where the circular
while there are specific instances of
differed based on geography. Retailers who excelled at mobile
localized inspiration, as a whole,
and display advertising focused on local events and implemented
a page "takeover" strategy to give their brands extra oomph on
retailers have not implemented
the page - but most retailer implemented half-hearted display
localization as a major part of their
strategies with no localization at all. And while several retailers
advertising strategy, particularly as
also provided unique events in specific stores, only Bass Pro
it relates to driving traffic to stores.
Shops, Gander Mountain, Best Buy, and Olive Garden provided a
place on their site where shoppers could find detailed, store-specific information.
Part of the challenge in localizing advertising is the ability to know what to say and who to say it
to. In that regard, the retailers we evaluated also revealed some significant gaps. Seven out of
the 20 retailers solicited mobile numbers on their site, and three retailers did not provide a way for
customers to sign up at all without first creating an account.
The net result across all retailers: while there are specific instances of localized inspiration, as a
whole, retailers have not implemented localization as a major part of their advertising strategy,
particularly as it relates to driving traffic to stores.
Department/Clothing Stores
In the department store vertical we evaluated five retailers: Macy's, J.C. Penney, Kohl's, Gap, and
Nordstrom. Macy's and J.C. Penney topped the list across the advertising channels evaluated,
with Macy's scoring 31.5 points and J.C. Penney, 31. Macy's scored higher in traditional
advertising channels (14.5 points vs. 13), while J.C. Penney edged out Macy's in the site-based
information they collect and provide (4 points vs. Macy's 3). However, while the two retailers tied
5
in the other two categories (digital and non-traditional channels), the details reveal two different
strategies at play.
Macy's has invested in a brand strategy that currently focuses on "My Macy's" - a localization
strategy based on Macy's stores. To that end, Macy's has targeted certain advertising channels
over others as ways to drive traffic to stores. So Macy's scored higher in display and mobile
advertising, and in how they are using Facebook and Twitter. J.C.
Department/Clothing Stores:
Penney had more consistent coverage across all digital channels,
including video advertising (where Macy's had no discernible
1. Macy's - 31.5
presence) and has additionally experimented in single-offer channels
2. J.C. Penney - 31
(Groupon and the like), where Macy's has not yet participated.
3. Kohl's - 26.5
4. Nordstrom - 25
5. Gap - 17
Outside of the top two, localized advertising efforts fall off quickly
among the remaining three clothing retailers. Kohl's and Nordstrom
finished close to each other with 26.5 points and 25 points,
respectively. Again, the same kind of differences can be seen between these two retailers as
between Macy's and J.C. Penney. Nordstrom has taken the approach of fully exploiting
localization in certain channels, and in other channels has little to no presence, while Kohl's has
focused more on covering all available advertising channels before taking the next step to drive
more localized or targeted communications.
Gap scored the lowest among the five clothing retailers evaluated (17 points), however, more of
this came from a lack of participation in certain channels than a lack of localized or targeted
efforts across channels. Gap has historically been hot and cold towards TV advertising, for
example, and with their laser focus on overall brand promise, they have not chosen to take on a
strategy that would lend an individual voice to each store.
Across the five retailers, Macy's and Nordstrom did the best overall in terms of supporting stores.
They provided the most online information about special events going on in stores and provided
the most support for stores to convey an individual voice to customers. However, even with the
strong support of these two retailers, overall the clothing/department store vertical appears to
have a big opportunity to do more to bring a sense of "local" into stores.
Electronics
As a group, electronics stores (Best Buy, Radio Shack, Staples, Office Depot and hh gregg)
boast the second highest overall rating, (22.7 out of a possible 45), bolstered in large part by
category-leading Best Buy’s ability to be seemingly everywhere at all times. The only category in
which any retailer out-performed Best Buy was the digital channel, where Radio Shack’s use of
video and mobile advertising was in a league of its own. At this particular time of year, Radio
Shack has leveraged its affiliation with bicycling legend Lance Armstrong to sponsor the “Tour of
California” bicycle race; highlights included a dedicated series of branded YouTube videos on the
retailer’s frequently updated YouTube channel featuring interviews, stage results, and promotions
at Radio Shack locations along the race route. Radio Shack also features full-screen advertising
within the Graystripe Network - popular video games which consumers play on their personal
mobile devices.
hh gregg (a fast-growing appliance and electronics chain with locations primarily in the Midwest,
mid Atlantic, and Southeast United States), is also worthy of calling out for its use of YouTube to
drive traffic to stores for such special events as grand openings and specific-store promotions.
Amid its highly-branded YouTube channel featuring high quality advertisements, Office Depot
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uses the platform to run the “Ask Christopher” series, based on a fictitious talk show host. While
the content is informative, the intended goal here was clearly to create viral videos for a younger
demographic's unpredictably quirky sense of comedy, a fairly risky move for the chain. Radio
Shack appeared to implement a more on-target approach to a younger demographic, investing in
mobile display advertising within a mobile gaming site.
While all electronics retailers’ run single offer promotions, most seem resistant to pay to
participate in increasingly popular branded alternative networks such as Groupon and Living
Social. All of the retailers we researched had some variation of a “buy a $20 coupon for $10”, and
as you might expect, all are frequently picked up by such “deal-hunter” sites as TechBargain.com
and GiveAwayScout.com. In every case, the consumer is then
Electronics Stores:
linked back to the retailer’s printable coupon to be used in stores.
RadioShack does use ShopRunner to provide unlimited deals on
1. Best Buy - 30
two-day shipping via Groupon. While BestBuy has multiple
2. Radio Shack - 25.5
appearances on Groupon as well, we could not find any Best Buy
3. Staples - 25
deals on Living Social. Only Staples appears to be experimenting
4. Office Depot - 18.5
with both name-brand deal-of-the-day networks Groupon and Living
5. hhgregg - 14.5
Social. In fact, Staples Canada is even more active in both
networks.
The electronics category does, however, truly belong to Best Buy. Claiming 30 out of a possible
45 points, it is difficult to find much flaw with Best Buy’s current tack. Traditional advertising
efforts are nationally controlled, seemingly on the brink of being localized. Mobile and video
efforts are clearly underway, and while neither is being leveraged to its full potential, one can only
imagine what the chain has in store for its YouTube and mobile branding in the near future.
Within Facebook, the retailer runs the usual mass promotions, but also occasionally features
targeted events (reward zone private shopping events, promotions at select stores, etc.).
Considering the consumer passion associated with much of Best Buy’s product mix (tech
devices, movie, video games, and music), we were somewhat surprised we didn’t find more
“special event” hours and promotions surrounding product releases; this could be attributable to
the time of year this research was conducted.
All in all, electronics retailers appear to be successfully leveraging across the more established of
the social networking channels, (namely Facebook and Twitter), but have far to go as it relates to
video, mobile, and alternative social branding.
Sporting Goods
As noted previously, sporting goods retailers (and casual dining chains) are far more inclined to
segment their advertising by category (football, lacrosse) than electronics and department store
retailers. Overall, with 20.8 out of 45 points, sporting goods
Sporting Goods Stores:
stores are the second lowest performer of our four groups - only
restaurant chains score lower. The chains we looked at were
1. Sports Authority - 30.5
Sports Authority, Bass Pro Shops, Dick’s Sporting Goods,
2. Bass Pro Shops - 22.5
Gander Mountain, and Hibbett Sports.
3. Gander Mountain - 22.5
Sports Authority has made far greater strides to target and
4. Dick's Sporting Goods - 19.5
localize its advertisements than any of its competitors. While
5. Hibbett Sports - 9
most of its targeting is still done by sport, with 30.5 out of the
possible 45 points, Sports Authority leads across every category except in-store promotions.
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One reason for its dominance is the chain’s use of Facebook. Dick’s and Bass Pro only use the
channel for mass promotions, Gander Mountain doesn’t even get that far, and Hibbett primarily
uses its page as a blog to answer questions such as “I signed up for you loyalty program, where
are my coupons?” Yet Sports Authority not only features mass promotions on Facebook, it also
targets local weekly promos by zip code – one of only four retailers in this study with the
capability to localize via the social network.
It is, however, worth mentioning that while Sports Authority does lead across nearly every
category here, advertising and promotions may not be the final word on the in-store shopping
experience to consumers. Both Bass Pro Shops and Gander Mountain do more interesting things
to get customers through their front doors, and then keep them engaged once there. These
tactics include special events, instructional staff, special guests, and unique store images (even
though some common themes prevail).
Gander Mountain has also done some creative things via deal-of-the-day networks like Groupon
and Living Social in order to bring customers in house. Specifically, the retailer has featured
multiple promotions through both alternative networks for shooting lessons, as well as a handgun
safety course for women. Hibbett Sports’ one-time offers are frequently picked up by deal hunter
sites, but showed no signs of participating in the major networks. Display advertising tended to
target specific segments - near-takovers of display ad space on hunter-oriented websites or
blogs, for example. In mobile advertising, Dick's Sporting Goods has experimented with mobile
ads, but they are the exception rather than the rule for sporting goods retailers - ironic, given the
extreme popularity of the mobile arms of sport-related properties like ESPN and the NFL.
Casual Dining
Casual dining restaurants (Outback Steakhouse, Carraba’s, Chili’s, Red Lobster and Olive
Garden) bring up the rear in our points-based system, but that is not to say the category is
entirely void of valuable practices from which retailers – of any category – can learn. On the
contrary, some of the chains we researched have undertaken some very clever initiatives.
For example, while all of our chains feature centrally-controlled Free Standing Inserts in local
publications, only Outback Steakhouse, the points leader in the category (21 out of the possible
45), provides access to its FSIs online. This is a fairly simple undertaking that all retailers would
be advised to consider adding to their online offering.
Other chains would also be wise to emulate Outback’s use of Facebook, Twitter, and YouTube:
the latter is loaded with the chain’s mass television ads, as well as
information about its “Feeding Freedom” program, whereby
Casual Dining:
customers can volunteer to bring food to troops deployed
1. Outback Steakhouse - 21
overseas, as well as its “Operation Homefront” menu, of which
proceeds are donated to military families. Outback is also highly
2. Carraba's - 19
active on both Groupon and Living Social.
3. Chili's - 18
4. Olive Garden - 17
The Carraba’s brand (also under the OSI umbrella) has recently
5. Red Lobster - 17
undertaken some well-designed mobile campaigns. Starting in
2010, Carraba’s began piloting SMS campaigns to promote to
multiple consumer touch points at the times of day when consumers would be most likely to be
influenced. The categories for these campaigns include early dining (4-6pm), late dining (810pm), Carside Carryout, Sunday Lunch, and Happy Hour. This just makes good business sense:
a text promotion that hits customers in bulk may work well in one time zone, but be completely
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ineffective in another. If you are going to be contacting customers on their mobile devices during
their busy days, consider the times when such messaging would have greatest effect to your
store’s peak shopping cycle, and whenever possible, localize time of delivery by geography.
Given the highly targeted capabilities of online advertising, this can kind of strategy can work
online as well.
Chili’s is the only other casual dining chain utilizing the mobile channel, but is doing so with great
effect. In 2010, Chili's started trials of location-based mobile advertising; up to 39 percent of
consumers responded to mobile calls-to-action, including click-to-navigate offers. Chili’s use of
video is limited to YouTube; while the company’s channel is well branded and full of content, it
makes no use of video promotions on its own site. Even more surprisingly, Chili’s does not
appear to do any type of promotion via search engines – not even when searching by the
company’s trademark “baby back ribs.” Like Outback, Chili’s is the only other restaurant making
use of Groupon and Living Social.
That said, there are many misses, and casual dining as a category measured out at the bottom of
the group we evaluated. Some of the biggest misses include search and display advertising Chili's, for example, didn't return a search against even their near-trademark term "baby back
ribs." Many of these chains have their restaurants listed in local guides (Yelp, Metromix, etc.) but
few seem to be taking advantage of display opportunities related to those guides, let alone in
related entertainment categories. All of these chains also miss the opportunity to offer localized
in-store promotional specials, a tactic which could no doubt yield positive results in helping local
branches of a large chain connect with the consumer on a more personal and localized level.
Conclusions
Stores make up an enormous asset in retail - between the real estate, the inventory to fill it, and
the people to staff it, the store is expensive. It is also where a clear majority of transactions occur
for all of the retailers that we evaluated. While it is true that a lot of digital marketing efforts have
been driven primarily by the online channel, retailers are increasingly recognizing that all
marketing efforts need to work together to help customers navigate multiple points of
engagement on their way to a purchase.
However, the proof just currently is not visible. A lot of infrastructure appears to be in place, with
more going up as we speak - collecting contact information to reach out to customers individually,
identifying and developing campaigns that appeal or reach out to local markets. But true
localization - both in the targeting and in the execution - still lags.
Recommendations
How should retailers proceed if they want to become more localized? Here are a few suggestions
based on the results of this research.
Be consistent in major branding elements across communications channels. If your logo is
on a green background in your print and TV ads, it should be on a green background on
Facebook or Twitter. If you have a strong, short-and-sweet tag line, you should use it in all of your
communications, whether mobile, online, or in print. When such elements are lacking, it's clear
the retailer doesn't have the same people in charge of each of those channels. But worse yet, it
gives consumers pause - especially in social channels where cyber-squatters (individuals
occupying a brand's name but not actually representing that brand) still abound. And given the
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cost of certain types of content - like TV advertising - there is an enormous opportunity to
leverage video content created for a mass campaign directly into other channels as well,
providing consistency and increasing the opportunity for return on the creative's investment.
Consistency leads to recognition, which leads to more engagement.
And yet, leverage the strengths of each communication channel to create something
unique. On the flip side of consistency, one consequence of going too far down the path of
consistent elements is wholesale cut-and-paste of content developed for one channel into
another. Facebook revealed these challenges best, with images clearly not sized for Facebook's
design and layout, often taken directly from the retailer's home page or print properties. The call
to action in a mobile campaign needs to be very simple and to the point, more so than even a
traditional display or banner ad - you simply won't have enough real estate on the screen to do
more than that.
Another advantage of certain channels is a specific strength in localization, and the majority of
retailers we evaluated specifically did not take advantage of this capability. For example, display
ads rarely were found on local sites (sites specific to a region) and almost none of the display
advertising we saw included a local call to action.
Include the store as part of the call to action. Especially in mobile campaigns, but really this
applies to any targeted promotion, the call to action may not be primarily online. In the course of
our evaluation, only Nordstrom and Radio Shack truly took advantage of targeted online
campaigns (primarily via YouTube) that were designed to drive traffic to stores - Radio Shack with
its Lance Armstrong campaign, and Nordstrom with some behind-the-scenes videos on preparing
stores for its half-yearly sales. YouTube can be a great channel for leveraging national ads as a
starting point for local twists or calls to action - leveraging the investment of a national campaign,
but still driving localized results.
We found very little evidence of retailers using mobile - a communication channel that may
already be near a store - to create a store-based call to action. In part this may reflect a common
situation where the online group has taken on mobile communications within the retailer and is
simply not tasked with driving traffic to stores, but in fact this is a huge opportunity - especially for
restaurants, which have both a geography- and a time-based incentive to reach consumers with a
well-placed call to action, like a 4pm text or display ad: "Don't know what's for dinner? We do."
This is by no means limited to mobile advertising, either. That 4pm online check on traffic is a
perfect opportunity to create a targeted offer, complete with a local store call to action. The call to
action can be very specific, thanks to the digital nature of localization capabilities, to include the
local store address or in the case of a restaurant, present a local phone number to make a callahead reservation.
Rethink video strategies. For many retailers, YouTube is the home of their television ads. But
there is so much more that can be done with video - and can be used to bring a local voice to
their video presence. Old Spice took "localized" video to the extreme, by answering Twitter
questions with custom-developed YouTube responses. So much more can be done - in line with
the first two recommendations above, the content creation process for mass TV ads can include
either unique elements that can be used for specific channels, or the TV ad itself can be
repurposed with care to be leveraged across communications channels like video display
advertising. And with video becoming a more important part of mobile - with a growing number of
smartphones and the imminent arrival of 4G as the standard - localized videos potentially have
more staying power and relevancy than a handful of slickly produced mass TV ads.
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If retailers received a grade for localization, the highest-scoring vertical - Department Stores would get a 58% - a high D grade. And that's about right. Not because retailers are close to failing
at localization, but because they are just starting to learn the basics. There is certainly still a lot of
opportunity.
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Appendix A: RSR’s Research Methodology
The “BOOT” methodology is designed to reveal and prioritize the following:
•
•
•
•
Business Challenges – Retailers of all shapes and sizes face significant external
challenges. These issues provide a business context for the subject being discussed
and drive decision-making across the enterprise.
Opportunities – Every challenge brings with it a set of opportunities, or ways to
change and overcome that challenge. The ways retailers turn business
challenges into opportunities often define the difference between Winners and
“also-rans.” Within the BOOT, we can also identify opportunities missed – and
describe leading edge models we believe drive success.
Organizational Inhibitors – Even as enterprises find opportunities to overcome their
external challenges, they may find internal organizational inhibitors that keep them
from executing on their vision. Opportunities can be found to overcome these
inhibitors as well. Winning retailers understand their organizational inhibitors and find
creative, effective ways to overcome them.
Technology Enablers – If a company can overcome its organizational inhibitors it
can use technology as an enabler to take advantage of the opportunities it identifies.
Retail Winners are most adept at judiciously and effectively using these enablers,
often far earlier than their peers.
A graphical depiction of the BOOT follows:
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Appendix B: Detailed Results
b
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Appendix C: About Our Sponsor
MaxPoint Interactive is an industry-leading consumer targeting technology company. We help
retailers, brands and shopper marketing teams reach the right online audience to drive in-store
sales.
Our digital retail advertising platform enables advertisers to execute highly efficient and effective
digital advertising that does more than grab attention – it drives foot traffic and in-store sales. This
easy-to-use platform offers advanced neighborhood-level targeting with national scalability and
reach.
Founded in 2007, MaxPoint has offices in New York, Chicago, Austin and Raleigh-Durham. Learn
how our easy-to-use platform can generate brand safe, rapid ROI for you, by visiting
www.maxpointinteractive.com. Follow us on Twitter: maxpoint_int
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Appendix C: About RSR Research
Retail Systems Research (“RSR”) is the only research company run by retailers for the retail
industry. RSR provides insight into business and technology challenges facing the extended retail
industry, providing thought leadership and advice on navigating these challenges for specific
companies and the industry at large. We do this by:
•
Identifying information that helps retailers and their trading partners to build more
efficient and profitable businesses;
•
Identifying industry issues that solutions providers must address to be relevant in the
extended retail industry;
•
Providing insight and analysis about a broad spectrum of issues and trends in the
Extended Retail Industry.
Copyright© 2011 by Retail Systems Research LLC • All rights reserved.
No part of the contents of this document may be reproduced or transmitted in any form or by any means without the
permission of the publisher. Contact research@rsrresearch.com for more information.
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